Alienware: Steam Machines will be our least profitable systems ever

Alienware: Steam Machines will be our least profitable systems ever
Aaron Lee

By Aaron Lee

May 20th 2014 at 12:51PM

Gaming PC manufacturer says getting good business out of Valve’s upcoming microconsole with be very challenging

Valve’s Steam Machines will be the least profitable hardware Alienware has sold in its history, the gaming PC manufacturer has said.

Valve has convinced more than a dozen makers of specialist gaming PCs to offer its upcoming microconsole, which is expected to use a Valve-designed operating system, SteamOS, and game controller.

But speaking to the Wall Street Journal, Alienware, the gaming PC division of Dell, which plans to offer Steam Machines, has said its doesn’t stand to make a significant profit on the Valve-branded hardware.

“It's going to be very challenging," said Frank Azor, general manager of Alienware. "This will absolutely be the least profitable system we ever sell.”

Valve’s clout as the biggest digital store for PC games worldwide would appear to be one of the reasons behind manufacturers’ decisions to approve production of their own Steam Machines.

Game industry research agency SuperData estimated that half of PC game sales over the internet now come from Valve. In January, Valve said Steam had more than 75 million active accounts, the majority of which were in North America and Western Europe.

However, some sellers are already seeing flaws in Valve’s offering.

Tuan Nguyen, director of products and marketing at computer seller iBuyPower, points out that with so many different kinds of Steam Machines around, consumer confusion is likely to be caused.

"It's like the Android phone marketplace. You have phones all over the place with wild specs and pricing," he said.

Valve’s Steam Machines are expected to go on sales in the autumn, according to comments from hardware manufacturers.